Sunday, October 2, 2016

It's Not What Trump's Return Revealed; It's Who Leaked It

(a) Deduction allowed
There shall be allowed as a deduction for the taxable year an amount equal to the aggregate of (1) the net operating loss carryovers to such year, plus (2) the net operating loss carrybacks to such year. For purposes of this subtitle, the term “net operating loss deduction” means the deduction allowed by this subsection.
(b) Net operating loss carrybacks and carryovers
(1) Years to which loss may be carried
(A) General ruleExcept as otherwise provided in this paragraph, a net operating loss for any taxable year—(i) shall be a net operating loss carryback to each of the 2 taxable years preceding the taxable year of such loss, and(ii) shall be a net operating loss carryover to each of the 20 taxable years following the taxable year of the loss.(26 U.S.C. 172)
Trump's tax advisers were correct when they noted that the loss would allow Trump to earn the equivalent amount of income over the next 20 years. This is a rudimentary tax concept; every tax adviser would make the exact same observation.

The political optics of this news story are deadly.

Here's the really important point: The key to this news story is a single piece of information among literally thousands of numbers and individual data points. Whoever leaked this information knew enough about taxes to know what to leak and no more.

If I was going to make a guess: someone really close to Trump who was intimately familiar with Trump's finances and who also didn't have a professional code of confidentiality.

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